Increased foreign direct investment inflows from China can help increase India's global supply chain participation and push exports, says the Economic Survey.
The Survey said as India looks to deepen its involvement in global value chains (GVCs), it needs to look at the successes and strategies of East Asian economies.
These economies have typically pursued two main strategies - reducing trade costs and facilitating foreign investment.
It added that India faces two choices to benefit from 'China plus one' strategy and that is either to integrate into China's supply chain or promote FDI from China.
"Among these choices, focusing on FDI from China seems more promising for boosting India's exports to the US, similar to how East Asian economies did in the past," the Survey, tabled in Parliament by Nirmala Sitharaman on Monday, said.
Moreover, choosing FDI as a strategy to benefit from the China plus one approach appears more advantageous than relying on trade.
"This is because China is India's top import partner, and the trade deficit with China has been growing. As the US and Europe shift their immediate sourcing away from China, it is more effective to have Chinese companies invest in India and then export the products to these markets rather than importing from China, adding minimal value, and then re-exporting them," it added.
The survey explained how increased FDI inflows from China can help in increasing India's global supply chain participation along with a push to exports.
At present, FDI from China in any sector needs government approval.
China stands at 22nd position with only 0.37 per cent share (USD 2.5 billion) in total FDI equity inflow reported in India during April 2000 to March 2024.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
Featured Video Of The Day
Exclusive: In Madhya Pradesh, Organic Farming Scheme Wilts In Soil Of Corruption
"Starlink Satellites Could Be Destroyed If...": What China Study Says Profit Growing, Hiring, Salaries Not So Much: Centre's Message To India Inc Eco Survey Calls For Paradigm Shift To Address Rising Mental Health Issues Among Indians Centre Rules Out Special Status For Bihar, Lalu Yadav's Party Takes A Swipe "Cops Can't Force...": Supreme Court Pauses Kanwar Yatra Food Stalls Order Elon Musk Reacts After Vivek Ramaswamy's Biden Prediction Goes Viral Kuwait Couple Divorces Within 3 Minutes Of Getting Married Due To This Reason Why Indian Students Opt For Finland Despite Increases In Tuition Fees Nutrition Tips: 10 Foods Combinations That Boost Their Nutrient Absorption Track Latest News Live on NDTV.com and get news updates from India and around the world.